New Delhi pays free trade agreements to diversify exports and compensate for the trauma of the customs tariff

The Indian government is intensifying its efforts in fast free trade agreements (FTAS) with the European Union, and many Latin American countries, as it seeks to balance the repercussions of the recent increase in the United States to 50 %.

In the wake of the 25 % mutual tax imposed on Indian imports by the United States on August 7, and a 25 % penalty tariff for the implementation from August 27, in response to the purchase of crude oil in India from Russia, the major Indian export sectors such as textiles, precious stones, jewelry, and seafood are facing severe scissors. Industry estimates indicate that many of these sectors can become uncleable economically in the American market due to definitions.

India’s trade with the United States was a vital flow of sectors such as ready -made clothes, home textiles, polished diamonds, shrimp, car components and engineering commodities. Krisel recently warned that slices, including polishing diamonds, carpets and home furnishings, are among the worst.

In response, the Indian government is speeding up negotiations on commercial agreements that can open new markets to accommodate the export volume.

The recent economic and commercial agreement (CETA) with the United Kingdom aims to double bilateral trade to $ 100 billion by 2030. The deal, which is currently waiting for the ratification of the British Parliament, is expected to enter into force by April 1, 2026.

Government officials confirmed that the talks with the European Union are also progressing steadily, as the thirteenth negotiation round was determined in September in New Delhi. The European Union was the second largest commercial partner in India in 2024, according to the European Commission, which represents trade in goods worth 120 billion euros in 2024, or 11.5 % of the total India trade.

Officials say an early agreement on customs tariff cuts, especially in engineering goods, pharmaceutical preparations, and textiles, can be reached in the upcoming rounds.

FTAS India negotiates a timely opportunity to redirect trade in sectors that harm American protectionism. The UK deal, in particular, can support Indian exports in textiles, pharmaceutical preparations, information technology and professional services. With the preferences of the similar tariff that is subject to negotiation with the European Union, India places itself as a competitive alternative to Chinese suppliers in the European market, especially as the European Union seeks to diversify supply chains.

FTAS is expected to allow definitions close to scratch in areas such as home textiles, leather and engineering goods. The Ministry of Weaving has already formed four sectoral committees to identify alternative markets and simplify compliance with exporters who convert focus into Europe and Latin America.

The Indian Free Trade Agreement with the four -country EFTA bloc (Iceland, Liechtenstein, Norway, and Switzerland), which is scheduled to operate from October 1, 2025, includes a $ 100 billion in investment over 15 years, and grant preferential access to sectors such as machines, dairy products, watches and chocolate. Meanwhile, negotiations with Chile and Peru have gained momentum.

The value of India’s trade with Peru was $ 3.1 billion in 2019, with iron and steel exports to clothes and drugs. An expanded trade agreement with Chile, which has already has a preferential trade agreement with India since 2006, is also explored to accommodate the sectors under pressure from American definitions.

The government frames these free trade agreements not only as tools for economic diplomacy, but as strategic cranes to ensure export flexibility in the face of geopolitical uncertainty.

While Prime Minister Narendra Modi is expected to raise the issue of definitions during his upcoming meeting with US President Donald Trump at the United Nations General Assembly in late September, commercial officials are shining in the hypothesis that structural diversification is the most sustainable path. “There is no comment. Commercial conversations are not bilateral,” a senior official stated, stressing that the shift from relying on one market is in line with India’s long -term vision of the export -led growth.

The government said in the response of Parliament yesterday that the negotiations of the Free Trade Agreement of India and India had concluded, and that India has signed 15 response and six preferential trade agreements so far.